Covenants-Not-To-Compete

The firm has a great deal of experience in representing both employers and employees (and former employees) in matters involving covenants-not-to-compete (sometimes referred to as restrictive covenants or noncompetition agreements). The firm has represented many individual physicians who were employed pursuant to such agreements, in negotiating or litigating a release from them.

Although restrictive covenants are enforceable under Florida law, there are many exceptions which apply that may be used to prevent or avoid enforcement, especially when a physician is involved. We have developed experience in identifying such exceptions and using them to our client's advantage. we have also developed a bank of experts to call upon who have developed expertise in various areas that are useful in litigation involving such matters, if litigation is necessary.

The firm represents employers, usually medical groups, medical practices, or hospital affiliated entities, in preparing restrictive covenants for their employees and in enforcing them, by litigation if necessary. We prepare a detailed, extensive Noncompetition and Nonsolicitation Agreement for our employer clients that forecloses most possible defenses that may be available to an employee under Florida law.

The firm represents individual employees and former employees, usually physicians or other professionals, in preparing strategies to avoid enforcement of such restrictive covenants, in negotiating or mediating a release from such agreements, and in litigating them to obtain relief for the client, when necessary. We have defended physicians in attempts by employers and former employers to enforce restrictive covenants through hearings for injunctive relief and other litigation.

For a copies of Florida state court decisions in which we were involved where we obtained relief for the physicians who were employees, click on the following links: 1, 2. (PDF)

(From a Presentation to the Orange County Medical Society on 3/21/2006)

These are seven points to remember regarding covenants not to compete (also known as restrictive covenants or noncompetition agreements). Disregard what your friends and colleagues tell you. Disregard what you CPA or practice management consultant tells you. We write, negotiate, make, break and litigate restrictive covenants for physicians and medical groups. If you sign a contract, you should expect that you will be required to honor the contract, every part of it.

This is correct information in Florida:

They are enforceable in Florida, pursuant to Sections 542.33 & 542.335, Florida Statutes. So don't believe what you hear or read that they are not enforceable.

There are many defenses available to a physician seeking to avoid enforcement of a restrictive covenant against him/her. For example, many are so poorly written that the are unenforceable, there may be a public policy reason against enforcement (e.g., health professional shortage area (HPSA)), there may not be a legitimate business that the employer has that needs to be protected, they may be over-broad in geographic area or in length of time.

They can be defeated, but litigation is very expensive and you will need experts.

There is a recent case from the Tennessee Supreme Court that held that in Tennessee, restrictive covenants could not be enforced by the courts against physicians for public policy reasons; similar reasons may apply in Florida. The court cited, among other authority, the AMA's Code of Ethics. Click here to view the case, Murfreesboro Medical Clinic, P.A. v. Udom. There is a recent case in the Florida Court of Appeal (upheld by the Florida Supreme Court) that also ruled that a restrictive covenant could not be enforced by a medical group (former employer) against a physician (former employee): Florida Hematology & Oncology v. Tummala.

If you are trying to avoid enforcement of a restrictive covenant against you, negotiation is usually the best way out.

A former employer seeking to enforce a restrictive covenant will often write a demand letter to your present employer or group and threaten to sue it for "tortious interference with a contract," which may cause you to lose your present job.

If you must litigate this issue in order to avoid enforcement of a restrictive covenant against you, consult an attorney and carefully plan all of your actions ahead of time. Suing the employer first may be your best option. Do not just go out and violate the agreement and let the employer sue you.